Oil prices fell below $75 a barrel on Thursday in Asia as falling global stock markets dragged down the confidence of crude investors.
Benchmark crude for August delivery was down 80 cents to $74.83 a barrel at early afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 31 cents to settle at $75.63 on Wednesday.
The Dow Jones industrial average fell 1 per cent on Wednesday to its lowest level this year and extended losses to 10 percent in the second quarter. All major Asian stock markets dropped on Thursday.
Oil traders often look to equity markets as a barometer of overall investor confidence.
“With global equities falling, the dollar holding strong, and the future uncertain, oil could easily drop in price,” Sander Capital Advisors said in a report. “One can easily make the argument that the price of oil should fall back below the $70 level.”
Oil prices ping-ponged between $64 and $87 in the second quarter on fluctuating investor fears about the impact of Europe’s debt and fiscal crisis on the global economic recovery.
In other Nymex trading in July contracts, heating oil fell 1.03 cents to $2.004 a gallon, gasoline dropped 1.13 cents to $2.0491 a gallon and natural gas down 0.1 cent at $4.615 per 1,000 cubic feet.
Brent crude was down 66 cents to $74.35 a barrel on the ICE futures exchange.